Financial advisers sound alarm on lack of support for SMEs
Financial advisers have raised concern about the lack of support for small businesses in government policy as firms feel the pinch of economic pressures.
Over half of advisers surveyed by alternative lender Thincats branded government policy as unsupportive of small and medium-sized enterprises (SMEs) whilst just six per cent said it was supportive.
Small businesses across the UK have struggled against a backdrop of dire economic conditions in the last year.
The rising costs of employment and high taxes debuted in Chancellor Rachel Reeves Autumn Budget have placed SMEs under renewed pressure.
Earlier this year, the Federation of Small Businesses (FSB) said Labour’s workers’ rights package, along with the hike in minimum wage, could wreak havoc on smaller firms, forcing them to trim headcounts.
Ravi Anand, managing director at ThinCats, told Morning Wire: “Given the UK has a bigger service-led industry, the NICs hikes and potential employment law changes have had a greater bearing.
“It’s definitely been harder in consumer facing industries like retail and hospitality, but also in healthcare with care homes also managing hire costs too.”
SMEs shrug off tariffs
Anand said the services-lean meant SMEs were less hit by tariff uncertainty that plagued the first half of the year, than those in manufacturing and automotive sectors.
The British Business Bank extended the capacity of the Growth Guarantee Scheme on the back of President Donald Trump’s tariff offensive in a bid to support SMEs.
The scheme provided £500m additional lending capacity to the bank to ensure smaller businesses would be supported with cashflow issues amid trade uncertainty.
Louis Taylor, the chief executive of the British Business Bank, previously told Morning Wire: “The uptake of the Growth Guarantee Scheme] has been very limited.”
“We are not hearing anything materially negative from the SME community about the impact of tariff uncertainty on companies.”
Thincats research also showed nearly four in ten of advisers reported a decline in deal activity in the first few months of 2025.
Despite this, 35 per cent said they were confident in the UK’s economic outlook for the next six months, mainly citing market stability and “pent-up demand”.
Anand said: “Following the Autumn Statement, many businesses have basically paused on any growth or acquisitions.
“Wider geopolitical issues are raising concerns about government debt and expectations of rate decreases by the Bank of England. Despite these challenges, the good news is that businesses in the mid-market are resilient, and advisers are picking up on positive sentiment.”